Supreme Court strikes down NCLT and NCLAT orders over fake AI legal precedents

In a landmark judgment delivered on July 2, the Supreme Court of India declared "zero tolerance" for fabricated or AI-generated fake legal precedents in judicial proceedings. The ruling, which has direct ramifications for the legal fraternity in Mumbai, struck down orders of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) after finding they had cited non-existent judgments.

A Supreme Court Bench comprising Justices PS Narasimha and Alok Aradhe delivered the judgment in the case of 'Pooja Ramesh Singh v Jammu & Kashmir Bank Ltd & Anr' (2026). The bench held that any ruling based on fictitious legal material is void "ab initio" and directly undermines the rule of law.

During the proceedings, the Supreme Court likened the infiltration of AI-hallucinated content to a toxic leak in the justice system. The court described this phenomenon as invisible, insidious, and catastrophic by the time it is noticed, adding that such material contaminates and takes away the very lifeblood of judicial determination.

The court also sounded a clear warning to legal practitioners, stating that advocates who cite unverified AI-generated material commit professional misconduct. Furthermore, the bench noted that judicial reliance on such fabricated content constitutes a serious lapse.

To address the systemic threat, the Supreme Court directed the Bar Council of India to constitute a committee to deliberate on the issue of advocates submitting fake and hallucinated material before courts as though they were genuine legal precedents.

The Bar Council of India, which is the apex statutory body for lawyers, has been directed to treat the issue with the utmost seriousness. The committee is tasked with earnestly deliberating on the matter and prescribing guiding principles to prevent such occurrences, alongside establishing disciplinary actions for future violations.